Advisory Opinion No. 98-71

Re: James P. Marusak, Esq.

A. QUESTION PRESENTED

The Petitioner, whose law firm is the Exeter Town Solicitor, a municipal appointed position, requests an advisory opinion as to whether he and the firm may advise the Exeter Town Council on the Nature Conservancy’s request for tax relief, given that the Petitioner represents the Environmental Council of Rhode Island, Inc., of which the Nature Conservancy is a member and sits on its Board of Directors.

B. SUMMARY

It is the opinion of the Rhode Island Ethics Commission that the Petitioner and his law firm, the Exeter Town Solicitor, a municipal appointed position, may not advise the Exeter Town Council on the Nature Conservancy’s request for tax relief, given that the Petitioner represents the Environmental Council of Rhode Island, Inc. The Nature Conservancy serves on the Environmental Council’s Board of Directors, participates in the Council’s advocacy efforts, and provides financial resources to the Council. That type of association, in which the Conservancy is in a position to affect the Council’s financial interests and objectives, triggers the prohibitions of R.I. Gen. Laws §§ 36-14-5(a) and (b).

C. DISCUSSION

1. Facts

The Petitioner is a member of the law firm of Gidley, Sarli & Marusak. The firm is the Exeter Town Solicitor. A request for tax relief concerning property owned by the Nature Conservancy (The Conservancy) is before the Exeter Town Council. The Petitioner represents the Environmental Council of Rhode Island, Inc. (The Council), of which the Conservancy is a member, in a pending matter before the Rhode Island Supreme Court concerning separation of powers. The Council is a non-profit coalition of 42 organizations and 120 individuals united to promote responsible environmental policies. The Council’s Board of Directors consists of a representative and alternate from each of its member organizations. The Council’s Executive Director and Issues Officer meet with representatives of the larger members of the Council on a monthly basis to coordinate their respective lobbying efforts. The Conservancy is one of the Council’s five largest members.

The Petitioner indicates that he was hired by and will be paid by the Council. The Council has raised a fixed legal budget of $4,500 by soliciting its members for voluntary contributions. The two largest members each contributed $1,500, but the Council is unaware which other members contributed. Although the Petitioner does not represent the Conservancy directly, he inquires as to whether he and/or his firm may advise the Town Council on the Conservancy’s request for tax relief based upon his relationship with the Council.

2. Analysis

Pursuant to the Code of Ethics, a public official may not have any interest, financial or otherwise, direct or indirect, or engage in any employment or transaction which is in substantial conflict with the proper discharge of his/her duties in the public interest. A substantial conflict of interest exists if the public official has reason to believe or expect that he/she, or a business associate, or any business by which he/she is employed or represents will derive a direct monetary gain or suffer a direct monetary loss by reason of his/her official activity. See R.I. Gen. Laws §§ 36-14-5(a), 7(a). The Code provides that a business associate may not appear before the public official unless the associate first advises the agency of the nature of his/her business relationship with the public official and the public official recuses himself from voting on or otherwise participating in the consideration or disposition of the matter at issue. See R.I. Gen. Laws § 36-14-5(f). Additionally, the official may not use his/her public office or confidential information received through his/her holding public office to obtain financial gain, for himself/herself, a business associate or any business which the person represents. See R.I. Gen. Laws § 36-14-5(d). Finally, a public official may not accept outside employment that would impair his/her independence of judgment as to his/her official duties. R.I. Gen Laws § 36-14-5(b)

A business associate relationship exists under the Code where two individuals are joined together to achieve a common financial objective. R.I. Gen. Laws § 36-14-2(8). The Commission consistently has concluded that public officials may not participate in matters affecting persons or entities with which they have business associations, including clients. See A.O. 95-76, A.O. 95-61 & A.O. 92-45. Further, a public official must recuse himself in matters where his law firm or its clients appears before him in his official capacity. See A.O. 96-76. The Petitioner’s current representation of the Council in pending litigation constitutes a business association that prohibits the Petitioner and members of his law firm from advising the Town Council on any matters affecting the Council and/or its interests.

Although the Petitioner does not represent the Conservancy in any direct manner, the Conservancy remains in a position to affect the financial interests and objectives of the Council. The Commission previously has concluded that where a member of a non-profit organization is in a position to affect the financial objectives of the organization through voting or other means, such membership rises to the level of a “business associate” relationship. See A.O. 96-46. The same analysis is applicable here, where a representative of the Conservancy serves on the Council’s Board of Directors. In addition to membership on the Council’s Board, Council officers meet with its larger member organizations on a regular basis to coordinate their environmental advocacy efforts. The Conservancy, as one of the five largest members of the Council, participates in these advocacy sessions. Further, although the Petitioner indicates that the Council alone retains him, the Council raised its legal funds by contributions from its members.

The Code of Ethics specifically prohibits the Petitioner and his firm from advising the Town Council on matters where the Petitioner has an interest that is in substantial conflict with the proper discharge of his duties in the public interest. The Conservancy’s involvement with the Council places it in a position to affect the financial interests and objectives of the Council. By representing the interests of the Council in the pending litigation, the Petitioner also is representing the interests of the Conservancy.

The relationship that exists between the Conservancy and the Council places the Petitioner and his firm in a situation where in at least many important respects the interests of the two organizations converge. Matters that affect the financial interests of the Conservancy clearly have the potential to impact the Council. The Commission concludes that the likelihood of a matter involving the Conservancy impacting the Council is reasonably foreseeable and that, therefore, the Petitioner and his firm should recuse from advising the Town Council on the Conservancy’s request for tax relief. The Petitioner and his firm also should file a statement of conflict of interest with the Town Council and the Ethics Commission in accordance with R.I. Gen. Laws § 36-14-6.

Code Citations:

36-14-2(8)

36-14-5(a)

36-14-5(d)

36-14-5(f)

36-14-6

36-14-7(a)

Related Advisory Opinions:

98-10

97-151

97-132

96-76

96-61

96-58

96-54

96-46

95-81

95-61

Keywords:

Business associate

Client's interest

Non-profit boards